The 5 Distinct Customer Relationship Strategies

implicit set of rules in place which indicate a regard for the customer. "A company that makes and sells butter might not have a direct customer relationship, and it might be selling a commodity product, but that company has to care deeply about customers.... The ultimate customer for this kind of company may [expect] a set of standards for things like purity, cleanliness, and such."

Some analysts think that this is not a strategy worth discussing. Ray Wang, founder and chairman at Constellation Research, for instance, argues that this is a nonstrategy, and that it sounds more like product placement, which relies on an established customer base to work.

Revenue-Focused

The second company-centric strategy, after the non-consumer-focused approach, is the revenue-focused strategy, according to Frankland. The main concern for firms employing this method is extracting the most revenue possible from existing consumers. They do this by trying to hang on to existing buyers and getting them to continue purchasing products or services in the future. In most cases, these customers have purchased from the company in the past, and the business assumes that they'll likely be interested in the next offer. Though it goes without saying that "most companies are trying to drive revenue," as Frankland points out, "that's not always necessarily the relationship driver." In this case, if there is an attempt to build a relationship with the consumer, it's mostly to the benefit of the company.

An obvious example of a vertical that uses such a strategy is banks. Typically, if a person has opened a bank account, he or she can expect at some point to receive an offer that suggests opening an additional account, one that promises more appealing perks, a higher payoff, or lower interest. (And, as we all know, some banks are guilty of overdoing this, sometimes sending several letters or emails a week.) Retailers are also known for employing this tactic by sending coupons or discount offers to customers who have made purchases from the company in the past.

The biggest drawback of this method is its potential for alienating customers. "If you don't get this right," Frankland says, "there's a very good chance that your consumers will turn you off. This is the most likely strategy in which people will actively disengage from interacting with you. If you think about those retailers that you've bought from once—and you might have been buying a gift, [if] they don't take any effort to understand that and just bombard you [with emails], after the third [one] that you get, you are just going to unsubscribe."

If you employ this strategy well, however, Frankland holds, it has the potential to make customers feel more comfortable spending money. Frankland cites GoDaddy.com, an Internet domain registrar, as a success story. Frankland had been subscribing to Web sites using GoDaddy for years without any noteworthy contact, and had never thought of his relationship with them as anything more than transactional. "It was kind of my go-to, because I already worked with them, and they were good at communicating when there was an order renewal coming up and that type of thing. But I never thought of them as anything more." Then, one day, a GoDaddy rep explained that it could help his company in the long run by choosing the best pricing options. Though the company was revenue-focused, it was

destinationCRM.com is dedicated to providing Customer Relationship Management product and service information in a timely manner to connect decision makers and CRM industry providers now and into the future.